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Galliford Try Building Ltd v Estura Ltd [2015] EWHC 412 (TCC)

In this case, the court, unusually, ordered a partial stay of an adjudicator's decision, after it concluded that to enforce in full would result in "manifest injustice" to the paying party, Estura.

Galliford had been engaged by Estura to execute certain works at the Salcombe Harbour Hotel using a JCT D&B 2011 contract. When it came to payment application no. 60, which served as an "Indicative final account and valuation summary" a difference of opinion as to the value of the works arose, with Galliford suggesting the final account would be over £12 million (£5 million more than the original contract sum) and applying for only £4,000 less than this. Estura disagreed, maintaining Galliford was only entitled to a further £147,000, but crucially failed to serve a payment or pay less notice.

Unsurprisingly, the matter was referred to adjudication, where the adjudicator decided Estura should pay £3.928 million but failed to deal with two issues raised by Estura; firstly what sum should have been stated to be due in application no. 60, and whether the sum actually stated to be due was payable. Estura attempted to refer these issues to a second adjudication but the adjudicator resigned due to a lack of jurisdiction (because it was not possible to open up the question of the true value of the works, following the decision in ISG v Seevic).

On enforcement proceedings by Galliford, Estura raised the issue that, following ISG v Seevic, it was not open to it to request a valuation of the works, and the matter could not be rectified in a subsequent payment application because the application in question was the last interim application. Further, there was no incentive for Galliford to now submit a final account because it had been awarded more or less everything it had asked for; in the absence of a final account there could not be a further dispute capable of reference to adjudication.

The judge decided that the "unusual combination of factors" in "exceptional" circumstances meant a risk of "irreparable prejudice" to Estura if the decision was enforced in full, and therefore ordered enforcement of £1.5 million, with the balance stayed and conditions imposed to incentivise the contractor to achieve PC and submit a final account. The court also took the opportunity to clarify the impact of ISG v Seevic, and in particular noted that the decision meant the employer had agreed the value of the works at the date of the application, but not at some other date, and did not prevent the employer from challenging the value in subsequent applications.

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